Flip Flop Changes Everything for Wichita Clubs

WICHITA, KS — City financial aid for health clubs just got more difficult in Wichita, KS, after a reversal that closed what some had thought was an opening door for the fitness industry.

In July, the Wichita city council approved $11.8 million in industrial revenue bond financing as well as property and sales tax exemptions to Genesis Health Club for construction of a new facility. However, a request by a second health club owner, Mohsen Etezazi of Fitness 2000, was rejected in November after a new city manager came on board and quickly opposed the issuance of this type of aid to fitness centers.

Fitness 2000, which has two health clubs in Wichita, had asked for $5 million in industrial revenue bond financing for a new club. The bonds would have offered about $785,000 in tax relief for the new club.

After denying Etezazi's request, the city council also changed the criteria it uses to evaluate economic development incentives, which had always been used for manufacturing companies, product exporters and corporate headquarters prior to the Genesis application.

The IRBs allow businesses to borrow money at lower interest rates and offers tax breaks for about 10 years in most cases. Genesis received property and sales tax exemptions of $1.9 million for its construction of two new clubs and expansion of a third club.

However, to be fair, the council is considering reversing its decision to give Genesis the aid. As of press time, a decision had not been made on the fate of Genesis Health Club's IRBs.